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If you drive for about an hour south of Taipei, you\u2019ll stumble upon one of the most important plots of land for the global economy. Massive buildings dot the 1,400 hectare-Hsinchu Science Park, featuring logos of the world\u2019s biggest and most advanced chipmakers: Taiwan<\/a> Semiconductor Manufacturing Company, United Microelectronics Corporation, MediaTek. They\u2019re just a handful of the approximately 500 tech<\/a> companies that call<\/a> the Park home.\u00a0<\/p>\n Back in the 1980s, Taiwan\u2019s<\/a> government wanted to establish a zone that specialized in manufacturing and research and development for the tech industry. The Hsinchu Science Park started off as a hub for PC production, with the government dangling carrots such as tax and land incentives to entice companies to set up shop there. But a decade later, the science park shifted to become something else: The place for high-end semiconductor production.\u00a0<\/p>\n \u201cThis park has been at the center of Taiwan\u2019s efforts to first build the technological capacity to have a chief industry, to second train the workforce that the industry requires, and third incubate most of the key firms that have emerged in Taiwan,\u201d Chris Miller, author of Chip War: The Fight for the World\u2019s Most Critical Technology, <\/em>says. \u201cIt\u2019s a really interesting and successful mix of education and training programmes where it\u2019s easy for firms to get established, and find partners and skilled workers.\u201d<\/p>\n Taiwanese companies, like those based in Hsinchu, have a tight grip on the world\u2019s semiconductor industry. Chip making companies like TSMC and UMC now count Apple, Nvidia, and Qualcomm as customers.\u00a0<\/strong><\/p>\n Other governments are now trying to emulate that success. Both the U.S. and Japan, one-time chip powerhouses, now offer billions of dollars in subsidies<\/a> for domestic chip manufacturing, whether in Arizona, Ohio, or Japan\u2019s Kumamoto<\/a> Prefecture.<\/p>\n Drive around Hsinchu Science Park, and you\u2019ll see the biggest names in chipmaking.<\/p>\n There\u2019s Taiwan Semiconductor Manufacturing Company (TSMC), the world\u2019s leading manufacturer of advanced chips and Asia\u2019s most valuable company.\u00a0<\/p>\n There\u2019s United Microelectronics Corporation (UMC), Taiwan\u2019s first semiconductor company and one of the world\u2019s top contract chipmakers.<\/p>\n And there\u2019s MediaTek, a market-leading fabless semiconductor company that designs chips for mobile devices and home entertainment systems.\u00a0<\/p>\n \u201cIf not for the science parks that offer all the infrastructure and land, a lot of tech companies may not be possible today,\u201d Morris Chang, founder of TSMC, said<\/a> at an event marking the 40th anniversary of the Park in December 2020.<\/p>\n Training is also key to the Park\u2019s success. It\u2019s close to industry-focused institutions like the Industrial Technology Research Institute or academic ones like the National Tsinghua University.<\/p>\n The Hsinchu Park now makes up a sizable part of Taiwan\u2019s economy. Integrated circuit companies reported 11.3 trillion New Taiwan dollars ($363 billion) in revenue<\/a> in 2022, over 75% of the total amount generated by the Park\u2019s 500-plus companies.<\/strong> (By comparison, Taiwan\u2019s total GDP in 2022 was around $720 billion).<\/p>\n It took a while to get there.\u00a0<\/p>\n The Park is known colloquially as \u201cchu-ker,\u201d an abbreviated form of \u201cHsinchu Science Park\u201d in Mandarin Chinese. But those who worked there called it something else: \u201cmonga-bo,\u201d or graveyard in Taiwanese slang.<\/p>\n \u201cIf you look back 20 years ago, there were no shopping malls, no cinemas. There was nothing there,\u201d says Lucy Chen, vice-president of marketing at Isaiah Research, a\u00a0Taipei-based tech consultancy.\u00a0<\/p>\n Chen started working in the semiconductor industry after getting her Master\u2019s degree in 1996, much of it at Lam Research, a U.S. wafer fabrication company. She spent two decades at Hsinchu Science Park, starting in the late 1990s. Even then, she remembered seeing farmers on her way to work.<\/p>\n She notes that having a lot of chip companies so close to each other was an asset. \u201cEvery second is money in manufacturing. If you lost the time you lost the money,\u201d Chen says.<\/p>\n Foundries would need to have support companies close by so repairs could be made at a moment\u2019s notice. A lack of transport infrastructure meant that companies, suppliers and other companies in the chip ecosystem all had to be in the same location.\u00a0<\/p>\n Other governments are trying to create their own semiconductor areas: the U.S., mainland Chinese and Japanese governments, just to name a few, are investing heavily in domestic semiconductor manufacturing. Taiwan\u2019s government is also trying to replicate the industrial park model across the island; TSMC\u2019s latest investments<\/a> in leading-edge chip manufacturing are in the central and southern parts of the island.<\/p>\n But Hsinchu remains the center of Taiwan\u2019s\u2014and the world\u2019s\u2014chip industry.\u00a0<\/p>\n \u201cSuccess breeds success,\u201d Miller says. \u201cThe bigger the ecosystem, the deeper the ecosystem, the easier it is for companies to succeed.\u201d<\/p>\n Fortune is hosting the inaugural\u00a0Fortune Innovation Forum<\/a>\u00a0in Hong Kong on March 27\u201328. Experts, investors, and leaders of the world\u2019s largest companies<\/em>\u00a0will come together to discuss \u201cNew Strategies for Growth,\u201d or how companies can best seize opportunities in a fast-changing world.<\/em><\/p>\n<\/div>\n\nHome to the biggest chip players<\/h2>\n
From \u2018graveyard\u2019 to tech hub<\/strong><\/h2>\n